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Company Voluntary Arrangements

A Company Voluntary Arrangement (‘CVA’) is a formal agreement a company can make with its creditors to address debt problems.

Debt has the tendency to snowball if not addressed immediately. The slightest problem in cash flow – whether due to an unpaid invoice, a downturn in the market or some other factor – is often enough to push a business into financial uncertainty.

We understand the burden this can place on you as a business owner. Whether you work alone or have employees, as well as associates and clients who would be affected by the closure of the business, the threat of insolvency can be overwhelming.

Our insolvency solicitors are dedicated to helping businesses, and business owners, face their debt issues head on. We can support you through all types of insolvency and restructuring processes, with the goal of reaching the best and most cost-effective solution for your business.

It is only possible for companies to enter into CVA’s. Therefore, if you operate your business as an individual (and are facing personal insolvency), or a partner in a partnership (other than an LLP), you cannot enter into a CVA, but may be able to enter into an Individual Voluntary Arrangement or a Partnership Voluntary Arrangement. We can also advise on these processes, as well as a variety of other options open to sole traders and partners.

We also provide advice to creditors in relation to CVA’s and to Insolvency Practitioners. Visit our Lender and Creditor Services and Insolvency Practitioner pages for general information.

Ready to speak to our insolvency lawyers? You can contact your local Isadore Goldman office in LondonNorwich or Portsmouth or email

Why choose our expert insolvency solicitors for advice about Company Voluntary Arrangements?

Independently recognised expertise

Our legal specialists are market leaders in this area with consistent recommendations in the prestigious client guides, Chambers & Partners and the Legal 500.

Tailored, commercially-astute advice

Your business is unique, so we provide a bespoke service tailored to suit your individual needs. As well as an exceptional standard of legal advice, our lawyers are highly reputed for their commercial awareness and ability to deliver practical solutions for the modern business.

Our wide range of experience covers high-value and complex CVA matters, including resolving CVA disputes.

Your legal options outlined in clear, practical terms

We are a dedicated insolvency and restructuring firm with a wealth of experience helping businesses and business owners navigate their way out of financial difficulty. A CVA is one method of approaching your debt issues, but we will always outline all of your options in plain English, so you can make informed decisions about what is best for your business.

What is a Company Voluntary Arrangement?

If a company becomes insolvent (it cannot repay its debts) and cannot raise new finance or come to voluntary agreements with its individual creditors, there are many options available to it and its creditors, including:

  • Creditors’ Voluntary Liquidation – Where the company directors and shareholders agree to wind up the company.
  • Compulsory Liquidation – Where a company’s creditors take legal action to wind up the company.
  • Administration – Where an administrator is appointed to take control of the company, with the aim of helping it to restructure, recover, or regain control after a period of financial stress.

However, these options can be very final. Liquidation involves closing down the company altogether. Administration does not necessarily require the closure of the company, but its directors and shareholders are required to relinquish control to the administrator during the process, and the outcome could be the sale or winding up of the business.

A CVA can provide an alternative to traditional methods of dealing with an insolvent company, particularly where the financial issues affecting its business are short-term. A CVA might be right for your company where its operations are viable in the long-term, but it is facing challenges due to mounting historical debt.

A CVA is an agreement entered into between an insolvent company or Limited Liability Partnership (‘LLP’) and its creditors, to address its financial difficulties.

A CVA can enable the company to resolve its financial issues while allowing it to carry on trading.

Once the CVA has ended, any remaining debts caught by the CVA are written off (the CVA creditors will receive only the agreed proportion of the debt owed to them), and the company can continue trading.

A CVA is not suitable for every company, but it is worth exploring this option. Our insolvency lawyers help businesses with CVA’s, including providing advice about whether this option is right for them.

A CVA may also be an option for Administrators. If you are an Insolvency Practitioner acting as an Administrator, our insolvency and restructuring specialists can also help you. Visit our Insolvency Practitioners page for more information.

How does a Company Voluntary Arrangement Work?

The company works with an Insolvency Practitioner (known as a nominee) to come to an arrangement with its creditors to repay a proportion of its debts over a defined period of time.  It is flexible in the sense that the terms of the CVA are ultimately a matter for agreement between the company and its creditors.

The company’s creditors will then be invited to vote on the proposed Arrangement. If 75% of the creditors (by value) agree to the CVA (and unless over 50% in value of the company’s unconnected creditors vote against the CVA), all of the unsecured creditors will be bound by the CVA. Any secured creditor will not be bound unless they agree, and most secured creditors will be unwilling to give up the benefit of their security to vote on, and be bound by, a CVA.  Once approved, the Insolvency Practitioner managing the arrangement is known as a supervisor.

Isadore Goldman can work alongside the company’s accountants and the supervisor and provide advice to the company where necessary of its rights and obligations under the CVA.

While the CVA is in place, the creditors bound by it cannot take legal action to enforce their debts. This gives the company breathing room to address its financial issues, restructure, or take any other necessary steps to improve profitability and secure the future viability of the business.

How long does a Company Voluntary Arrangement Last?

A CVA needs to be in place long enough to give the company adequate opportunity to address the problems causing the financial distress, which might include restructuring. As such, a CVA will usually be in place for between three and five years.

The exact length of time will vary depending on the needs of the company’s business and creditors. We can provide advice tailored to the requirements of your business, including how long your CVA may need to be in place for.

Is a Company Voluntary Arrangement right for your business?

Cash flow issues affect all businesses, but in this particularly uncertain economic climate, one small problem can tip a business into financial distress.

Many businesses that are technically ‘insolvent’ are only facing temporary difficulties, which can be resolved with creditor cooperation and the dedication of its members to restructure or address operational issues.

A CVA can support a company that is otherwise viable through hard times and towards a brighter future. Some of the benefits of entering into a CVA include:

  • The directors remain in control and can continue trading the company whilst the CVA is in place
  • Creditors bound by the CVA cannot take legal action against the company whilst the CVA is in place, giving the company essential breathing space
  • The cost of a CVA is often lower than other insolvency procedures, such as Liquidation, Administration or Receivership
  • Creditors are likely to receive a higher return than if the company goes into liquidation and it preserves a potentially viable customer for the future
  • The CVA process is more private than other insolvency processes. Although a CVA must be registered at Companies House, there are no formal advertising requirements
  • Although secured creditors are typically not included within the CVA, they are likely to be supportive

A CVA may not be appropriate for your business if it is unable to return to a position where it is once again profitable. In these circumstances, another option, such as Administration, Receivership or Liquidation, may be more suitable.

If a company cannot keep to the terms of the CVA, then it might be in default. In those circumstances the supervisor may have to petition to wind up the company. We can advise you on any potential defaults and the implications of them.

Our insolvency solicitors can provide practical advice on whether a CVA may be right for your business or whether alternative options exist which may suit your needs better.

Contact us

For clear and practical advice about dealing with debt, including Company Voluntary Arrangements, please speak to our team of experts today in London, Portsmouth or Norwich.